I was away from my screens this morning, so I didn’t get a chance to play this one. But, this makes 8 for 8 non-losers. This one took its time to reach the target, but was only -0.6R at its worst point.
The Setup
Total SA (NYSE: TOT) gapped up on good volume. I noticed that the first 3 10-minute bars were alternating green/red at about the same height:
That’s a sign of a potential box play forming. The ADX on the 10-minute charts was rising, and the 5MA was catching up to the price. I reasoned that by the time a box play finished setting up, the 5MA would be even closer.
Entry Criteria and Trade
I took a look at the 1-minute charts, and saw this one touched at 5 points instead of 4, before breaking out in the up direction. Very nice! Here’s how the trade would have played out:
- Local high forms the upper box boundary at 67.09
- Local low forms the lower box boundary at 66.93
- Local high touches 67.09 exactly
- Local low reaches 66.92… lower box boundary is lowered to 66.92. At this point, the box is formed. Once the price retraces 25% back into the box, a trade will be taken on a breakout.
- The price bounces off the upper boundary again
- The price breaks out after a dip halfway into the box area. A long trade should be taken, with initial stop at 66.92. Assuming a fill at 67.10, a price target of 18 cents would be 67.28.
The price target was hit a bit later. The trade went at most a little over halfway back into the box before hitting the target, which would have felt pretty safe compared to yesterday’s box play (which took me to within 1 cent of being stopped out!).
| Stocks Mentioned In This Article | |
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| Stock | Links |
| TOT |  |  |  |